PHILADELPHIA – A Philadelphia engineering and contracting firm who alleged that a minority owner diverted work away from it to his own company and that it and its subsidiaries lost millions in profits as a result, has had those allegations dropped and is compelled to pay damages to one of the defendants as part of a settlement.
Environmental Construction Services Inc. (ECSI360), Element Mechanical Services LLC and Limbach360 LLC sued Dominic Menta and Environmental Control Services Inc. on Aug. 1, 2019 in the U.S. District Court for the Eastern District of Pennsylvania citing the Racketeer Influenced and Corrupt Organizations Act, the Lanham Act and other counts.
Menta is a minority owner of ECSI360, and the other two plaintiffs are subsidiaries of ECSI360. The suit also stated Menta owns and operates Environmental Control Services.
“Beginning as early as 2012 and continuing through the time of filing this complaint, Menta has repeatedly and successfully diverted work away from plaintiffs and to Environmental Control,” the suit stated.
The plaintiffs alleged Menta represented to third parties that the plaintiffs would be doing the work when it would actually be Environmental Control. The suit stated this subsequently led to ECSI360 and Limbach360 to vie for jobs, without knowing it while Environmental Control would do the work and get the money, all while using the plaintiffs' minority contractor.
The plaintiffs also alleged Manta stole trade secrets from ECSI360 and Element Mechanical and gave them to competitors.
“This diversion of business to Environmental Control allows Menta to capture the entirety of the profits derived from the diverted projects without dividing them with the majority owner of ECSI360, Michael Brown,” the suit stated.
The plaintiffs seek the court to order a permanent injunction against defendants to block them from using their trade secrets, and grant an award for the plaintiffs to be determined at trial, as well as any relief the court sees proper.
The defendants answered the complaint with numerous counterclaims and, along with Environmental Control Solutions, Inc., initiated a largely overlapping third-party action naming Michael A. Brown, Raptor360, LLC, and others.
A Nov. 29 order from U.S. District Court for the Eastern District of Pennsylvania Judge Nitza I. Quiñones Alejandro indicated that the action had settled, subject to final documentation. Post-settlement proceedings remain pending.
The plaintiffs are represented by Daniel E. Brobst, John K. McDonald and Matthew M. Coin of Cozen O'Connor, in Philadelphia.
The defendants are represented by Anthony R. Twardowski, Andrew J. DeLuca and Donna T. Urban of Zarwin Baum DeVito Kaplan Schaer & Toddy, also in Philadelphia, plus Gilbert J. Sciutti of the Law Office of Gilbert J. Sciutti, of Somerdale, N.J.
U.S. District Court for the Eastern District of Pennsylvania case number 2:19-cv-03477